I recently had a telephone conversation with a good friend and long-time client of ours at Global Gold. He continues to be frustrated by trying to explain to some of his close friends why they need to have gold in their portfolio. He laughed that one friend called him “crazy” for his affection to buying and storing gold. He isn’t the first gold investor I know that has been referred to as “crazy”. Well look who’s crazy now: Palantir Technologies invested $50.7M in physical gold now in August. Will more large companies follow?
We learned that Palantir Technologies invested a cool $50.7 million on 100-ounce gold bars now in August, bars that are apparently being stored in the northeast United States, all according to a securities filing for financial results reported by Barron’s on the company.
In response to the purchase, Shyam Sankar, Palantir’s chief operating officer said the purchase reflects their view that “you have to be prepared for a future with more black swan events”. Palantir added in the filing, on the subject of having purchased physical metals, that “the company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice”.
Palantir Technologies, headquartered in Denver and founded by a group including Peter Thiel, Stephen Cohen, and Alex Karp, is a public software company specializing in big data analytics. Their software is used by large corporate institutions, U.S. military and intelligence, and U.S. civil entities, to just name a few.
Considering the line of business they are in, are they aware of some “black swan events” that we aren’t? Perhaps the next important question to ask now is if this is just the beginning of other major companies/players making similar purchases?
Will Other Companies Follow?
Danielle DiMartino Booth, CEO of Quill Intelligence, said recently in an interview with Kitco News’s editorand-chief, in response to Palantir’s purchase, that “these moves…are strong testaments to how far down the rabbit hole central banking, this grand experiment, has gone. They speak to the fact that there is a huge concern about the soundness of money, about the sanctity of fiat currency.”
She went on to say that central bankers were not picking up on these type of company decisions as signals that market participants have a waning confidence in central bank monetary policies. She believes more companies will be following suit as you always need that first big mover to get this kind of ball rolling.
Adding to this, as was reported in July, we were already aware that central banks were ramping up their purchases as well, with countries like Thailand, Serbia, and India already having increased their holdings in H1, 2021. And those are only the ones mentioned by the media thus far.
Crazy is as Crazy Does
What does this all mean to our “crazy” client, and all of us other private investors that would easily be lumped in with him? The saying “Crazy is as Crazy Does” comes to mind, meaning craziness is relative: one person’s crazy is another persons’ rational. This is very much applicable to us gold investors.
Obviously, the big boys are also stocking up on gold, and in Palantir’s case, even physically stored gold, and not the paper or unallocated stuff. Add central bankers (ok, maybe they are crazy really) and the likes of Warren Buffet, Ray Dalio, and other well-known investors that have been reported as investing in gold, and you realize, we are actually ahead of the curve.
Maybe “crazy” is better applied to those that haven’t allocated parts of their portfolios to gold yet?